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French company in talks to hire laid-off Wipro employees

French company in talks to hire laid-off Wipro employees
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First Published: Mon, Oct 26 2009. 08 54 PM IST
Mumbai: French semiconductor design firm Inside Contactless SA is in talks with Wipro Ltd to employ the Indian software exporter’s research and development staff at its French unit.
If the talks are concluded successfully, some 60 people, currently working with NewLogic Technologies GmbH’s arm in France, will be employed with Inside Contactless. The talks are part of an agreement with employee unions at NewLogic.
Newlogic is a semiconductor research subsidiary of Wipro, India’s third largest information technology (IT) services firm.
Richard Vacher Detourniere, chief financial officer of Inside Contactless, confirmed the talks in an emailed response on Sunday.
“Strictly speaking, since the employees will be laid off by Wipro France, in case Inside Contactless completes a transaction, it won’t be by taking employees directly from Wipro but by hiring employees being laid off,” he said.
Wipro declined to comment because it will announce financial results for the quarter ended 30 September on Tuesday.
Indian regulations bar a firm from talking to the media just before posting results.
On Monday, Wipro’s shares gained 0.38% to close at Rs591.25 on the Bombay Stock Exchange, while the benchmark Sensex declined 0.42% to 16,740.50 points.
Wipro’s decision to shutter the French unit of NewLogic—an Austrian firm it acquired in 2005 for $56 million (around Rs261 crore)—had drawn political criticism in France because the company had availed of a research credit scheme that gave it tax benefits of around €5 million (Rs35 crore).
Last month, after meeting with France’s industry minister Christian Estrosi, Wipro’s country head Christopher Martinoli said the firm would do its best to ensure employment for the workers and would set aside €5 million—the amount it saved in tax benefits—for that purpose.
In a 2 October statement, Estrosi said: “Many buyers had emerged at this stage, including the company Inside Contactless, whose candidacy appears serious and could take a significant number of employees of the site.”
An industry analyst cautioned that interference by French authorities could dampen investment, particularly from Indian IT firms that are seeking a wider exposure to European markets.
“This may not completely stop companies from investing in France, but firms considering investing through either organic or inorganic route would definitely be more cautious and mindful of such possible complications,” said an analyst with a foreign investment advisory firm, who declined to be named because he is not authorized to speak to the media.
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First Published: Mon, Oct 26 2009. 08 54 PM IST